Packback, which came up with an on-demand, digital solution to beat the high cost of college textbook rentals, has raised $1 million in seed funding from a high-profile group of investors.
The startup, launched in Chicago by a trio of Illinois State University students, did much of its fundraising in public, and landed Mark Cuban as an investor after appearing in the spring on ABC's “Shark Tank.”
The rest of the money came from more than 20 angel investors, including Howard Tullman, CEO of 1871 Chicago and a longtime startup investor who has a venture fund called G2T3V. Mark Achler, a Redbox veteran and venture capitalist who is raising a $25 million fund with Troy Henikoff, is also a backer, as are veteran tech entrepreneur Mark Tebbe, and Rishi Shah, founder of health care content company ContextMedia Inc., and David “Buzz” Ruttenberg, a real estate developer who invests through Lakewest Venture Partners.
Working with textbook publishers, Packback allows students to rent digital versions of their textbooks for $3 to $5 per day. It also provides online price-comparison tools for students to find or sell books. The company has nearly 3,000 titles and 24,000 users on more than 80 campuses.
Packback's headcount is seven employees, with two more joining by year-end, co-founder Mike Shannon told me. The company recently moved from Catapult's co-working space to a sublet in ContextMedia's new offices in River North. It also has 150 students working part time at schools across the country as campus ambassadors nationwide.
Mr. Cuban, who invested $250,000, made his fortune at the peak of the first dot-com boom with Broadcast.com and previously crossed paths with Mr. Tullman, whose credits include Tunes.com, and Mr. Tebbe, founder of Lante Corp.
“The big question we got was how involved would (Mr. Cuban) be?” Mr. Shannon said. “He's jumped in directly with a few conversations we had with publishers, and, like Howard, he's got a great referral network. He's really good at using his celebrity to open doors. And it adds credibility. He's a huge fan of our brand ambassadors. He's going to have them do some things for other Mark Cuban projects.”
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